As the stock market continues to swoon and economic forecasts turn more ominous, a growing number of bankers are beginning to heed alarms from regulators about deteriorating credit quality.

Risk-management practices have made more headlines in recent months than at any time since the early 1990s, when many banks struggled to stem rampant loan defaults.

Though bankers say they have refined their commercial lending practices by tightening standards and carrying more reserves, they also say serious problems remain.

"Loan structures have weakened," said Richard Verrone, a consultant and former senior executive vice president at Centura Bank in Rocky Mount, N.C.

"Many of the people in banking have not been through a downturn. People in risk-management positions have not gone through this before."

Mr. Verrone said he recently polled 126 community banks with assets of $200 million to $1.5 billion and found that only 12% used risk-rating commercial-lending models.

"There's a contention out there that 'We know better than a model,'" Mr. Verrone said. "Community bankers don't want to put something into a black box" that would make lending decisions for them, he said.

The study, sponsored by Robert Morris Associates, revealed that community banks rely on a hodgepodge of credit policies, based largely on an individual bank's resources.

"There was a disturbing point," Mr. Verrone said. "We found some banks had no due diligence about other people's loans. They'd say, 'I've bought 10 loans from this bank and they've been good. So I'm not going to check them anymore.'"

The study's preliminary findings will be released at the Philadelphia- based group's annual credit conference, which is set to begin in San Diego on Saturday. Credit officers from around the country will have an opportunity to compare their practices to those of their peers.

Lee B. Murphey, chairman of Robert Morris and chief credit officer of First Liberty Bank, a unit of $1.5 billion-asset First Liberty Financial Corp. of Macon, Ga., said he hopes government warnings will prod more banks into corrective action.

"What we're trying to do is say, 'Here are the tools. Take them back and look at their applicability at your own institution and put them into action.'"

The findings are not unlike those in a survey conducted last year by the association through First Manhattan Consulting Group. That study, which polled 64 of the largest U.S. banks, found that in the 1990s credit crunch, banks with poor risk-management practices suffered the sharpest declines in stock price.

"You can't say that good risk-management is a function of size," said Mr. Murphey. "It's a function of management."

Much of the ado about credit standards has come from Julie L. Williams, the acting comptroller of the currency, and former comptroller Eugene A. Ludwig.

In July, Ms. Williams told bank executives she was ordering examiners from the Comptroller's Office to take a closer look at bank loan portfolios.

The examiners were ordered to look for loans with "structural weaknesses," including overly generous maturity schedules, inadequate capital, and a lack of personal guarantees from borrowers.

Later that month, Ms. Williams said she had stopped short of threatening banks with punitive action for fear of a credit crunch. But on Sept. 17, Ms. Williams and Donna A. Tanoue, chairman of the Federal Deposit Insurance Corp., said they may require more capital for some bank lenders and raise the rates paid for deposit insurance.

Allen W. Sanborn, president and chief executive officer of Robert Morris, said regulators' alarm, along with troubling economic factors, may be pointing to the end of the strong credit cycle, which would expose bank risk.

Chief among those factors is the 30% decline in the price of bank stocks since the market's all-time high in July, compared with a 15% decline in the overall market.

"There are cracks in the dam," Mr. Sanborn said. "Clearly this is all coming to a head. The economy has shifted in the last 90 days, but bankers have time to prepare for a more difficult economy."

However, not everyone believes that the credit cycle is turning.

Steven Bavaria, a loan analyst with Standard & Poor's, said the Federal Reserve's decision Tuesday to cut the overnight interest rate by 25 basis points suggests the Fed "sent a message that we want to do the right thing, but at the same time, we're fundamentally healthy."

Mr. Bavaria said before the stock market swoon there had been a decline in credit standards. He said it looked as if lenders "were scraping the bottom of the barrel."

But with the crash came a fear among lenders that the strong credit cycle was over, Mr. Bavaria said. "It refreshed people's memories about how loans should be made. Assuming this is not a bear market, people have brought themselves back to standards that they should have been at all along."

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